STAR-listed firms' buyback plans a show of confidence

Zhu Shenshen
Three Chinese listed tech firms have announced a wave of share buyback plans, showing confidence of the companies' value and a market demand rebound this year.
Zhu Shenshen

A batch of Chinese listed tech firms, from online service, chip to electronics components industries, announced a wave of share buyback plans recently, showing confidence of the companies' value and a market demand rebound in 2024, Shanghai Daily learned on Thursday.

STAR-listed AMEC, or Advanced Micro-Fabrication Equipment Inc, a top chipmaking equipment vendor in China, announced a plan on Thursday to buy back shares valued at 300-500 million yuan (US$41.6-69.4 million).

The repurchase plan shows the company's strong confidence in China's chipmaking industry.

AMEC has built new manufacturing and research facilities in Nanchang of Jiangxi Province and Shanghai's Lingang area, which are expected to fuel rapid revenue growth in 2024.

Between 2012 and 2023, AMEC's ​​average annual revenue growth rate hit over 35 percent, the company said in a statement to the Shanghai Stock Exchange (SSE).

Also on Thursday, Kingsoft Office announced a repurchase plan valued at 50-100 million yuan. The STAR-listed firm will expand sales of its WPS, regarded as the Chinese equivalent of Microsoft's Office.

The company may benefit from the wave of generative AI as its WPS AI allows users to deal with personal documents and company business information more efficiently in computers.

STAR-listed firms' buyback plans a show of confidence
Dong Jun / SHINE

People test WPS AI's new features in a WAIC exhibition in Shanghai last year.

Meanwhile, Giantec Semiconductor, a memory chip maker, also announced a share repurchase plan valued between 50 million and 100 million yuan. The company is expected to benefit from the rebound sales of smartphones and PCs globally in 2024.

The three STAR-listed firms gained about 3 percent on Thursday as the market heard the plans. Comparatively, the STAR 50 Index climbed 0.75 percent to close at 690.01.

Founded in 2019 in Shanghai, China's STAR Market kicked off a trailblazing leg of the country's innovation drive and capital market reform. But the STAR 50 Index trembled about 30 percent the past year.

Since Tuesday, about 60 STAR-listed firms have announced plans to buy back shares or increase holdings.

It's supported by the industry regulator the China Securities Regulatory Commission (CSRC). It encourages listed firms to "strengthen their awareness of rewarding investors, and more actively carry out buybacks, write-offs and cash dividends."

Buyback is an important means for listed companies to boost confidence. By buying back its own shares, it has a positive impact on stabilizing the share price while optimizing the shareholding structure, experts said.

In the bigger capital markets, firms are also speeding up similar plans.

Will Semiconductor announced last week to buy back shares value up to 1.2 billion yuan. It's noteworthy that the Shanghai-listed just finished another share repurchase plan in September.

In the Hong Kong market, tech giants Tencent and Xiaomi also issued share repurchase plans.

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